Zen And The Art of Double Entry Bookkeeping

As I write this, I’m sitting in the Club Lounge at London’s Heathrow Airport waiting for my flight to Istanbul

A big, flashing red sign on the screen tells me that my morning flight has been delayed until after lunch, yet I’m strangely calm for someone whose carefully planned day has just evaporated in a puff of virtual smoke.

And through my mind (after a brief mental stomp and complaining to myself that it’s not fair) went the thought: I’m fortunate to live a life where the biggest problem I have to deal with is my flight being delayed by two hours.

Actually, it’s odd. Incompetence, ineptitude and stupidity will have me seeing red (and usually reaching for my phone and it’s Facebook app!). In that respect I guess you could say I’m a ‘magnesium’ personality (if you remember your school chemistry lessons): very easy to set off, burns very brightly but within moments the flame dissipates and it’s gone: handle with care!

But when it’s just life refusing to do what I told it to do, friends are often astonished how calmly I can take it. People who know me well often remark that I have an unusual ability not to worry about the mistakes of the past or the uncertainties of the future (actually I think it’s more of a swan-thing: calm on the surface, frantic below the waterline, but hey! perception is reality).

And so as I sat in the lounge, teeny latte on the table at my side (which actually annoys me far more than the flight delay: why can’t BA put decent sized cups in the lounge????), I took the opportunity to ask myself (because let’s face it, success in life comes from asking yourself better questions): “how did I learn to not beat myself up about past mistakes, and not worry about how the future will turn out?”

And the answer that came into my mind was truly odd.

I learned it at business school.

Indeed, I probably started to learn it many years ago when I trained as an accountant.

Ironically it was accountancy training and an MBA that gave me almost zen-like perspective.

There’s an idea in economics called ‘sunk costs’: once you’ve spent something and you can’t get it back, there’s no point including it in your decisions about whether or not to spend more (you could argue it’s a fancy way of saying “there’s no point worrying about spilt milk”).

It’s a great way to look at the world.

OK so I stayed overnight in Heathrow and got up at stupid o’clock to be at the airport for my flight. That’s all well and good. And since there’s no way I could have known about the delay there’s no point beating myself up about how I wouldn’t have hurried, and I’d have slept in my own bed and all of that. More to the point, being annoyed about it doesn’t change it (in the same way that shouting at a manager who has overrun on their budget isn’t going to get the money back). When you look at it in that perspective, letting go of the past is actually quite easy.

And what about the future?

Again, there were two guiding principles I learned at business school (and before that in accountancy training).

The first is, the investments with the highest return are the riskiest. And by the same token, the safest investments give the least return; that’s why banks can get away with giving no interest at all–effectively we are paying them to hold out money and not screw up, while inflation slowly (or not so slowly) renders our savings worthless.

The second is that if you do your due diligence properly–if you weigh up the risks, consider all the possibilities, and still decide to go ahead–then all that’s left is the unforeseen. Worrying about the unforeseen won’t stop it from happening. And by definition, the risk must be so infinitesimal it didn’t show up when you were doing your due diligence.

It’s like launching a ship full of cargo. You launch it out to sea, and you take comfort in the fact that you gave it the best navigation equipment, the fastest engines, the safest lifeboats and the most experienced crew you could. You did everything in your power. There’s no point worrying now, because it won’t change anything.

Of course, the wise merchant doesn’t just launch one ship: you launch many, so if one doesn’t make it to port you have others still on their way.

Which brings this back to running a business.

If I had to sum up my advice to anyone running their own business it would be this.

1. Don’t beat yourself up about past mistakes. It doesn’t change a thing that has happened.

2. Don’t worry about the future. It doesn’t change a thing that will happen.

3. Always have lots of ships in the water. It doesn’t change a thing, but when things happen you won’t mind so much.